Fintech · Industry brief

On September 17, 2026, the SEC Staff issued no-action letters to eToro USA Securities Inc. and Alpaca Securities LLC permitting them to offer "zero cash balance" brokerage accounts where customer funds are held in external accounts with banks or money services businesses rather than in brokerage accounts. For eToro, operating as an introducing broker, the SEC confirmed it will not pursue enforcement action under Section 15(c)(3) of the Securities Exchange Act or Rule 15c3-1 if it maintains minimum net capital of the greater of $5,000 or the amount otherwise required, provided specified conditions are met. The letters address the net capital and customer protection implications of this model, with each firm receiving guidance tailored to its role as either an introducing broker or carrying/clearing firm. (Source: SEC Division of Trading and Markets no-action letters)

On September 11, 2026, the Federal Reserve Board, FDIC, OCC, and NCUA issued proposed interagency guidance to replace their 2023 third-party risk management guidance, signaling a shift toward greater acceptance of bank-fintech partnerships. The Agencies stated they would "move away from overly broad, process-driven approaches" and "encourage responsible innovation," adopting a framework focused on material financial risks rather than prescriptive requirements. Key changes include a more favorable view of fintech partnerships (acknowledging that newer fintechs without long operational histories may still be viable partners), elimination of the "critical activities" framework in favor of "higher-risk" relationship definitions, greater deference to banks' risk assessments, relaxed third-party inventory requirements, and allowance for banks to leverage new risk management arrangements including co-ventures and standard-setting organizations. The Proposed Guidance also applies to credit unions via NCUA inclusion. Comments are due by November 16, 2026. However, banks remain ultimately liable for third-party actions, and the Agencies issued a companion Joint Statement signaling intent to more closely scrutinize critical systems service providers and bring direct enforcement actions against them where warranted, indicating that fintech providers will remain under significant supervisory scrutiny despite the more flexible framework.

Singapore fintech startup IPID raised $16 million in Series A funding led by Foundation Capital with participation from Citi, HSBC, QED Investors, Monk's Hill Ventures, and Quona Capital, according to DealStreetAsia. The cross-border payments technology firm, founded in 2021 by former SWIFT employees, provides payment validation and account-identification services to financial institutions across 50+ countries. IPID plans to deploy the capital to expand its global payment intelligence network, accelerate growth in the US and Europe, and develop capabilities for US payment rails, stablecoins and digital assets. The company reported $0.31 million in revenue for 2024, up from $0.04 million in 2023, though losses increased to $2.26 million from $1.93 million in the prior year.